Closing the Gap on Healthcare, Cost, and Coverage for Working Americans, with Dan Cosgrove

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[00:00:35] [SPEAKER_00] Dan Cosgrove, welcome to the conversation today. Hey, John. Thanks for having me. It is a pleasure to be with you. You're joining us from the Boston area. I'm south of Salt Lake City in Utah. Today, we're going to be talking about rising healthcare costs and strategies that organizations and leaders can utilize to try to mitigate those rising costs and to really leverage healthcare as a benefit to attract and retain great talent.

[00:01:01] [SPEAKER_00] This is, of course, an ever-present challenge for organizations because as a part of total compensation for organizations, healthcare continues to be an increasingly large portion of that total compensation package for many organizations. It's just a real challenge. And so I think most people tuning in are thinking, yeah, we would love to provide better benefits, but it's more expensive than it's ever been.

[00:01:32] [SPEAKER_00] We're feeling more squeezed than we've ever felt. And anyways, that's what we're going to discuss today. And we're going to explore how can we handle this. And I know you have lots of really great ideas around this. As we get started, I'm going to share your bio with everybody. You spent over a decade at Procter & Gamble, Berkshire Hathaway and Nike, before you broke a way to focus on your passion of healthcare.

[00:01:58] [SPEAKER_00] The first healthcare company that you started broke 4 million in under three years. And now Dan has a nonprofit, Better Benefits USA, and was just recognized by Procter & Gamble as one of the top 10 companies run by P&G alumni, thanks to their work in disrupting America's broken healthcare system. And I completely agree. I personally think it's completely broken.

[00:02:24] [SPEAKER_00] I would love to find more ways to disrupt it. And I know that's the work that you're doing. You're trying to, you know, in the meantime, while we're trying to disrupt it, you're also trying to find ways to mitigate the expense. And so, yeah, Dan, anything you would like to add by way of your background, personal context, or for your organization before we dive on in further?

[00:02:45] [SPEAKER_01] No, I mean, I'd say the only additional part is like, how did I find my way from P&G into benefits? And that's really because my other nonprofit, a mental health company, Mental Health Matters, you know, a lot of people here probably feel the same way. Like, employees are not a headcount. Employees are, they go by a first name and a last name. And they've got spouses, they've got kids that you probably also know on a first name basis.

[00:03:13] [SPEAKER_01] You're trying to take care of them as the business owner or the executive over there. And so that's the issue I ran into running my mental health company. He's like, healthcare costs, guess what? Another 20% renewal. And it's like, damn, I have had enough of this. Like, what can I do here? And so I, you know, as background, I'm the son of two lawyers. So you got to assume that I like to challenge the status quo and take a contrarian perspective. So that's exactly what I did. I went down a rabbit hole for at least nine to 12 months, did a ton of research, read a lot of tax books.

[00:03:42] [SPEAKER_01] Like, even like Tom Wheelwright, who's the CPA for Rich Dad, Poor Dad. Like, I read his books too. And they ultimately figured out that there's a lot of things in our tax code that people could be using to enhance their employee benefits package without costing them anything. And so that's really where, like, the light bulb went off. It's like, all right, if this is true, let me test it out on my own people. It worked. I saved $3,600 a year per employee. I gave them better benefits, took care of their entire family. So I call it kind of sustainable funding model for our nonprofit.

[00:04:10] [SPEAKER_01] It was like, more companies need to see this because our industry is just so broken, so many misaligned incentive structures. I was like, you know what? Let's get in here. Let's start helping groups. And let's only get paid if we save them money. Simple as that.

[00:04:22] [SPEAKER_00] Yeah, I love it. And absolutely misaligned incentive structures. That's a really great way to put it. You know, like, we can point fingers all day long. We can say evil corporations, blah, blah, blah. Like, whatever. And, you know, you can assign motives. And, you know, people certainly have strong feelings. And I have strong feelings. But let's strip that away and just say misaligned incentives. Like, the system is broken, right?

[00:04:52] [SPEAKER_00] So we can be soft on people, hard on systems. And there's no question. Like, the system is broken. Misaligned incentives. And that alone, regardless of what you think about everything else, that alone is enough to just make a mess of everything. And, you know, then we don't even have to worry about or spend time and energy, you know, around the motives or, you know, all that kind of other stuff.

[00:05:20] [SPEAKER_00] Because, you know, you can't get into somebody's head. And I don't really know for sure if that evil executive is over there plotting how to, like, destroy individuals or whatever. Like, maybe they are. Maybe they aren't. I don't know. But, like, ultimately, misaligned incentives are certainly there. And the system is certainly, you know, has problems. And that I don't think is debatable, honestly. Like, I think that is just a factual statement.

[00:05:47] [SPEAKER_00] And then once we can acknowledge that, then we can actually start to look at, you know, ways to deal with it, right? Exactly.

[00:05:55] [SPEAKER_01] Exactly. Yeah. And, like, sure, in the larger macroeconomic impact, do we want to change those systems 100%? Like, medical loss ratios would be one of the first things I would change because it creates a very misaligned incentive model. And I'd make sure brokers can't get paid a fixed commission. They get paid a fixed PEPM instead so that they're not motivated to sell a more expensive plan. All those things I'd love to do, that's going to take a longer time. So, instead, it's just like, how do we play the game that's been dealt and actually help people get that?

[00:06:25] [SPEAKER_01] Because the only way you're actually going to start creating change on those big giants, those health insurance giants that are hosing everybody, is you start beating them at their own game. Once you start doing that, now they're going to be like, okay, now we have to pivot. So, basically, our goal as a nonprofit, we want to create that Kodak moment for the healthcare industry.

[00:06:43] [SPEAKER_00] Love it.

[00:06:43] [SPEAKER_01] Where then those groups are going to be forced to change or else they're going to become like Kodak.

[00:06:47] [SPEAKER_00] Yeah. I love it. I love it. So, you know, just create that disruption that they have no choice, right? Right. So, you talk about your nonprofit's mission. It is to close the gap on care, cost, and coverage for hardworking Americans. What do you mean by that? And how do you work to fulfill that mission?

[00:07:07] [SPEAKER_01] Yeah. Well, so, what I mean by that is, right now, everybody sees their health insurance renewals. Those go up. Their deductibles go up. Their max out-of-pocket goes up. Everything goes up. And our current healthcare system is designed in such a way that it's a sick care system. We make money off of people being sick or injured. I don't know. I feel like morally that's just wrong. And we need to have a value-based care system. So, how do you get a value-based care system? We bring that, as I call it, the Netflix model and apply it to the healthcare space.

[00:07:36] [SPEAKER_01] Whether you watch one show or 100 shows on Netflix, you still pay the same amount each month, right? Like, that's the goal of Netflix subscription basis. That's what we want with healthcare. Whether you see one doctor or 100 doctors, you're still going to pay the same amount each month. Now, by doing that, people with a little cough or cold are much more likely to actually talk to their doctor about that instead of fighting through it. Just, oh, yeah, I can tough it out because I don't want to have to go to the doctor's office and get hit with a $250 expense.

[00:08:01] [SPEAKER_01] Well, unfortunately, as we've seen all too often, when you are putting off seeing the doctor for that little symptom, it tends to turn into a major medical situation. That's why 75% of Americans now have a chronic condition.

[00:08:14] [SPEAKER_00] Yeah.

[00:08:15] [SPEAKER_01] So that's what we're really trying to solve for is reverse the psychology of when I should seek healthcare. You should seek healthcare the moment that you have a cough or cold, but instead do it in a value-based care model where you're not being paid or being nickel and dimed to death every single time you want to talk to a doctor. How do we get there? I can get to that a little bit later, but that's really the core objective of it.

[00:08:33] [SPEAKER_00] Yeah. Well, and what do you say to folks? I mean, there's certainly plenty who will say that's crazy. Like, why would we want to overload our system with all these petty little things that don't matter? Like, why would we want to overload, you know, the clinics and the hospitals and the urgent cares and all these different things with like a common cold? Why would we do that? We don't have enough doctors. We don't have enough nurses already. Why would we possibly want to do that?

[00:09:03] [SPEAKER_00] That's a great question.

[00:09:04] [SPEAKER_01] And the answer is you're not overloading them. Um, so what we're really trying to do is we're making this virtual base. So like COVID was terrible. It was terrible. Right. But the silver lining that came out of COVID, we found that 80% of medical expenses could be done virtually now.

[00:09:19] [SPEAKER_00] Yeah.

[00:09:20] [SPEAKER_01] Well, guess what? A lot of people, including doctors and nurses and everything like that, they don't want to go into hospital anymore or a patient. Like they would prefer to be virtual. So you've got a lot of people that have actually left the medical field that are now being virtual providers. So you've got plenty of capacity there because guess what? A cough or cold, that takes a five minute visit. It's a lot faster than a major surgery for somebody. Like, so it's, it's quality of time spent first, like the quantity of time spent. And when you do it virtually, it's just so much more convenient for people.

[00:09:50] [SPEAKER_01] Like I, on New Year's Eve. So I've got a toddler on New Year's Eve. My, my toddler unfortunately gets croup all the time. Well, we had already done a hospital visit in the middle of the night and earlier December. And we're just like, all right, it's another two feet of snow outside. So he has a cough. Let's address this in advance. So it's like 8 PM on New Year's Eve. We were able to have a virtual visit. They were able to prescribe the, the medicine that we need in the event that he had a major reaction.

[00:10:18] [SPEAKER_01] So in that way, we're not fighting through two feet of snow to get to the hospital in the middle of the night. That is proactive healthcare management. So you can avoid that hospital expense that a lot of people instead are just like, all right, emergency, got to get over there. Like, no, that's, that's not the solution. But that's what is ingrained in our minds is just like the moment something goes wrong, I need to go to the emergency room.

[00:10:38] [SPEAKER_00] Yeah. And, and for anyone who, who has been, you know, overseas or in a different country that has a different healthcare system, you know, again, some, some in this country bemoan, you know, universal healthcare or other systems in other countries. And they say, you know, there, there's lots of arguments, you know, that people say. And I, and I wonder, have you, have you ever actually experienced it in other countries?

[00:11:02] [SPEAKER_00] I have, I've been in other countries where there's, you know, neighborhood clinics, you know, and on every corner and you can go in anytime you have a fever or a cold or whatever. However, my experience in those settings has not been like the doomsday, you know, sky is falling narratives that you hear, you know, from, from people here who say that's the worst thing possible to have universal healthcare.

[00:11:27] [SPEAKER_00] In fact, it, you know, it was actually amazing to have that kind of, you know, coverage and just preventative care and just opportunity for people to, to, to go and meet with somebody anytime you had any sort of issue. And, and to your point, it was not, it was not an overload. You're, and you're shift, you're shifting, right? You're shifting the kind of the, the burden, right?

[00:11:52] [SPEAKER_01] So instead of like serious care, a tier one risk versus a tier four risk and more people want to tier one risk that is less risky, you know, the cough or cold. All right. I can treat that. I've seen that every day. I don't know the tier four, like you're going to get misdiagnosis also in the tier four because you just don't see those cases as much. Yeah. I see what you're saying. Yeah.

[00:12:12] [SPEAKER_00] Yeah, exactly. Exactly. And so, you know, I, I just, I would encourage and, and, and challenge people, you know, perhaps who have heard, we, we've all heard the narrative. We've all heard the arguments.

[00:12:24] [SPEAKER_00] Uh, and just before you jump to conclusions and before you like automatically jump to those stereotypes to like actually consider like, and maybe, um, challenge, you know, the, the preconceived notions that you might have, or, you know, the, the party talking points, you know, the political rhetoric or whatever. Like, like, like, like maybe just consider that maybe there's other motives behind, you know, why those talking points are the way they are.

[00:12:53] [SPEAKER_00] And, and maybe there's something else behind it. And, and maybe there's actually, uh, maybe there's actually something else that could be useful. That's all, that's all I'm suggesting. Um, because that's part of the problem with the system that we have. Uh, so anyways, I don't want to make this into a huge political thing, but, but just to acknowledge that, uh, if, if, if we want to seek. Better care. We want to seek more timely care. We want to seek more affordable care. I think that's, you know, part of the issue.

[00:13:21] [SPEAKER_01] Oh, absolutely. I mean, yeah, you just have to follow the money, right? $250 million a year spent on lobbying politicians for the healthcare industry. How are you going to get any change there when that much money is going into the pockets to keep things the way they are? You have to be willing to change things differently. And you have to understand that the message track that people are delivering to you, uh, might be misguided. They don't have a fiduciary responsibility to do to, to reduce your, your employer costs.

[00:13:47] [SPEAKER_01] Uh, only the employer has the fiduciary responsibility to reduce the liabilities and expenses for their employees and give them better healthcare. Cause ultimately at the end of the day, employers should be focusing on retaining talent and attracting talent. Cause that is your most important asset. And if they walk out the door, they're going to your competition. That's taking care of their employees a little bit better. And now you're now in a scrambling game just to maintain your revenue and your profit margins. The moment you lose your resources, AKA your people, that's the moment you start turning into a Kodak.

[00:14:16] [SPEAKER_01] And that's what every company wants to avoid. So, yeah.

[00:14:19] [SPEAKER_00] Yeah. So, so what are some of those strategies that you're using to disrupt, you know, in a, in an ideal world, we completely like at a macro level, we're shifting the whole system. Right. But, but, but in the meantime, like what, what are some of those strategies that you're dealing that you're utilizing?

[00:14:36] [SPEAKER_01] Yeah. Yeah. So I always say it's like a two phase approach. Phase one is how do we utilize the tax code to give people better access to healthcare? Phase two is then after we utilize phase one, how can we now help them buy their health and health insurance or healthcare for less? And it's different strategies based on the size of the client. If they're sub 50, we might take advantage of the subsidies in the marketplace.

[00:14:55] [SPEAKER_01] If they're over 50, like say a 400, 500, 5,000 person client, that we're actually utilizing the fact that they're probably self-insured and reducing their medical claims by using our preventative healthcare program. That's going to solve for 80% of medical needs. So like to, to give you like greater detail, what I'm really talking about on a preventative care program, we're following, following the tax code. So section 125. People are very familiar with HSAs and FSAs. We'll just say it is an optimized section 125. Again, you have to do these things right.

[00:15:25] [SPEAKER_01] Like there, there's always compliance concerns around utilizing the tax code, but if you do it right, you're going to be just fine. And when you do it right now, every single employee plus spouse gets up to age of 26 are going to have free access to virtual healthcare 24, 7, 365. That's a big help because now they're not going to have to sit in traffic, leave work early to go to the doctor's office rather than themselves or their kids or all that stuff. So that's a big time saver and value add.

[00:15:47] [SPEAKER_01] The next part you want to layer in prescriptions, and you don't have to look too hard on how that screwed up that industry is like 40 state attorney generals have sued the PBMs. So what we're trying to do is again, we're not replacing somebody's health insurance, but we're trying to say, just use our program first. Cause we're going to cover 90% of all drugs in America, which is like a thousand plus drugs for free. Now, is that the specialty drug? No, it's the tier one and tier two that again, you're paying five to $50 every single time you want to refill it. That can now be free mail directly to your door.

[00:16:15] [SPEAKER_01] And then the final part is we try to go like eliminate the middleman in the specialty space. So those parts can't be free, but just for example, GLP ones are really hot topic for a lot of groups. And in fact, there's been several surveys by employees. I think two thirds that said they would leave for another employer that was covering GLP one. Really? Yeah. Yeah. This is like a Texas based survey that I found recently. It's very interesting. Um, so anyhow, what we're saying is like, well, GLP ones one, if you offer it via insurance,

[00:16:45] [SPEAKER_01] insurance tends to make it really difficult to get. And then by the time they approve it, you're paying like a thousand bucks a month for it. Right. What if we made it a lot easier to get that drug and we made it at the wholesale price, which is truly like two 22, two 42 a month. So it's not free, but it's about 70 to 80% less than what insurance is doing. And it's hassle free. And that's the goal is just give better value to employees. Cause yeah, especially if you're a self-insured client, you just reduce your GLP one costs, which about five to 10% of employees want to GLP one.

[00:17:14] [SPEAKER_01] You just reduce that cost by $750 a month. Like that's a massive savings.

[00:17:20] [SPEAKER_00] Yeah. That's crazy.

[00:17:21] [SPEAKER_01] So that's, that's some of the things that we're trying to do there. And it just so happens when you're using the tax code. Well, when you have pre-tax deductions occurring, what does that also doing for the employer and employee? It's reducing how much you're paying in taxes. And that's the second unlock is how do you make these programs self-funded? The answer is use the tax code, understand how to use the tax code, which is where our group comes in, but use the tax code because that is how it is written. No matter how much the IRS wants to bitch about it, it is legally written the way it is.

[00:17:50] [SPEAKER_01] And no politician, Republican or Democrat thinks it's in their best interest to make healthcare even worse in America. Well, I love it. I love it.

[00:17:56] [SPEAKER_00] But, you know, I, you use a system in your, to your advantage, uh, as massive as the system may be, um, leverage it, you know, to, to your advantage and, and make these costs, you know, lower the costs as best you can for yourself, for your people, uh, for your organizations. Cause we all know, we all know that the costs have just continued to rise. We all know that the employer portion of, of covering healthcare benefits in that portion

[00:18:25] [SPEAKER_00] of total compensation has just been going through the roof for years. Uh, it's harder and harder for employers to have meaningful coverage for their employees. So they're passing more and more of that burden onto their employees. It's just, it's just, it's like this unsustainable, no win situation for everybody. And so utilizing these types of strategies, it's not like the end game solution, right? But it, it is, uh, it is something that you can do in the meantime.

[00:18:54] [SPEAKER_00] And I love that your organization is helping organizations do this, uh, Dan, I know at the time I'm going to have to let you go and get on with your busy day, but as we wrap up, I wanted to give you a chance to share with the audience, how they can connect with you, find out more about your work, your team, so they can work on these strategies with you and then give us the final word for today.

[00:19:13] [SPEAKER_01] Yeah, for sure. So individually, you guys can find me on LinkedIn. It's Dan Cosgrove. I put like a little family emoji in front of it. Um, just for a hint secret for people. If you ever want to avoid like the spam auto messages on LinkedIn, put an emoji in front of your first name, because now you'll know when somebody is automatically messaging you, no person in real life is going to write emoji damn. So you'll know it's automated. So I always ignore them. So that's one way to get in touch with me.

[00:19:38] [SPEAKER_01] But, uh, from a business standpoint, you can visit us at betterbenefitsusa.org. Uh, highly recommend if you're somebody in HR or business owner, go into the resources tab, play around over there. All those resources are free. Take advantage of it. Uh, I know most groups are going to force you to meet with them first before they show you this stuff. No, we want to give you the information. If you think it's valuable, then you can schedule time, time to talk with our team, but we're not going to force you to talk with us before you want to scope it out.

[00:20:06] [SPEAKER_01] Um, and just know that, yeah, if, if you do want to work with us, we're only going to get paid based on what we save you. We're not here to replace your broker. Any of those fun things. Like we are a truly supplemental benefit or a benefit you would add on top of what you're doing with the end goal being, let's find a way to ultimately drive better healthcare outcomes, reduce healthcare costs for the employer and employee. So you can sustainably grow as a company instead of just funding the overly greedy healthcare companies.

[00:20:36] [SPEAKER_01] So that's really our goal. Um, but yeah, as we said at the top, our goal as a nonprofit is to close the gap on care costs and coverage for hardworking people. Simple as that. We need to stop paying the health insurance companies and we need to start paying our people more and taking care of the bottom line.

[00:20:50] [SPEAKER_00] That's, that's our story. I love it. I love it, Dan. Thank you so much. It's been a real pleasure. I encourage audience to reach out, get connected, find out more about what Dan and his team can do for you. And as always, I hope everyone can stay healthy and safe that you can find meaning and purpose at work each and every day. And I hope you all have a great week. Thanks for joining us for this episode of the podcast. We hope you stay healthy and safe and please join us again soon.